In Search of Medicaid Waste, Fraud And Abuse

Members of the executive committee of the Joint Audit Committee met briefly Wednesday afternoon so that co-chairs Sen. Bryan King (R) and Rep. Kim Hammer (R) could inform lawmakers that they have asked the Division of Legislative Audit to release on Friday a report on the state’s Medicaid program.

A more complete audit report on the Department of Human Services (DHS), which would include the Medicaid study, was slated to be released sometime in March.

While the report was not released today (Jan. 30) and legislators were not told the results of the findings, King said that its disclosure could help with decision-making in the Medicaid debate taking place at the capitol.

King told committee members that the report would include findings from DHS reports from 2009 through 2011 – presumably data that has been reviewed previously – and it would include new results from a 2012 audit. King declined to comment further on the report saying he would wait until Friday to offer more commentary.

Talk Business sources say the audit report will show “hundreds of millions of dollars” in possible Medicaid waste, fraud and abuse in the state’s nearly $5 billion low-income health care program. When pressed for an explanation of the root of the alleged waste – systemic fraud, physician billing, or individual abuse – sources declined to present more details. However, the sensational number may be predicated on disputed calculations, which a DHS official alluded to in a statement released this evening.

At today’s meeting, Legislative Audit director Roger Norman said DHS would “likely have significant differences in their interpretation of the data” that would be presented by auditors. He also said that the report was still incomplete as it was waiting for responses from DHS.

Amy Webb, director of communications for DHS, issued a statement on Wednesday night. She said the agency considered the release of the audit special report “very premature and highly unusual.”

She said the agency has “repeatedly expressed concerns about its accuracy, the accounting methods used and the impossibly short timeframe our agency has had to respond.”

Webb added, “The flaws in the report were so alarming that DHS officials contacted a UALR statistician and asked that he review some of the methods used by the auditor. He found that flawed sampling procedures and unsupported conclusions caused potential program errors and a huge overstatement of questionable costs.

“In addition, the audit process is typically months long and provides DHS ample opportunity to challenge findings and provide necessary documentation. That has not happened with this audit report.

“For example, on Thursday our staff received 25,000 documents on which some of the report findings are based. We were only given until tomorrow at noon to go through all of those documents, review the corresponding audit material and draft a response that reflects a more accurate picture of the Medicaid program.

“DHS understands that in a program the size of Medicaid auditors will find areas in which we need to improve our processes or make changes to the program. It’s common for us to challenge findings in the yearly audits. However, in all of the years that DHS has worked with Legislative Audit, we have never seen a report like this in tone. It uses sensational but rare examples and questionable methodologies to paint the program in the worst light.”